ساكو 1 فبراير

[احمد سعيد]

Published: Feb. 01 2005, 07:35 GMT
Unbearable wait for a breakout from the range continues..

Tension is mounting heading into the coming weekend’s G-7 meeting. We’re not expecting any dramatic news from the meeting, but we still see a weaker USD on the other side.



MAJOR HEADLINES – PREVIOUS SESSION
Comatose Asian session sees rangebound USD and weakish JPY.

Australian Trade Balance slightly worse than expected.

Japanese markets nervous about upcoming G-7.


THEMES TO WATCH – UPCOMING SESSION


Since the Chicago PMI didn’t disappoint yesterday as did the other recent regional manufacturing surveys, the ISM becomes a bit harder to predict today. Also, today’s ISM is only a market mover if it is dramatically weaker or stronger than the 57.0 expected.

The Fed is expected to raise rates by 0.25% tomorrow and we may not see this market committing directionally until after the FOMC announcement and policy statement tomorrow evening.

We still prefer the weak USD view as the market may be overpositioned for USD strength as it expects a disappointing outcome to the G-7 meeting that may already be more than priced in.

Trading Note: One might consider buying a short-dated option (EUR/USD call) and turning off the computer until Monday of next week, as the market may give everyone a rough ride until we get into next week – pick your entries carefully and don’t trust any move unless it holds for reasonable amount of time.

















EURUSD

EUR/USD still looks supported above 1.3000, though with the event risks coming fast and thick, we can’t rule out the market dipping once again. Still, as we head into late next week, the preferred scenario is that of a weak USD as all downside momentum has left the building. 1.3300 is the first major target higher. 1.3460 is the upside swing level that could indicate a try toward 1.3850 and possibly beyond.

[font='trebuchet ms', arial, sans-serif]Resist.1.3189

1.3107

1.3044



1.2943



1.2861



Support
[/font]






GBPUSD

GBP/USD is still rangebound with 1.8930 as resistance and 1.8800 as support. One can play the range for the short term, but a break higher may take GBP/USD to 1.9000 and higher. 1.9100 is a key swing level that could indicate more upside to come if it is pierced to the upside. Watch out for the housing market related numbers today at 09:30 GMT.

[font='trebuchet ms', arial, sans-serif]Resist.

1.8955


1.8897




1.8828


1.8781


1.8723Support
[/font]






USDJPY

Nobody dares touch USD/JPY with a ten-foot pole right now, suggesting that when the pair finally commits, we could see a large move indeed. Resistance remains at 103.90 and a downmove to 101.70 and beyond may materialize next week once the G-7 meeting is out of the way.

[font='trebuchet ms', arial, sans-serif]Resist.

104.50



104.06



103.88



103.18



102.74

Support
[/font]






EURJPY

EUR/JPY toyed with 135.35/45 area resistance today and could break through it and head a half-figure or so higher in the near term. Eventually, however, the pair may find resistance and head back to the key swing area down around 134.00. This pair could get very volatile in the very beginning of next week as one of the major rhetoric themes of late has been a demand from the European side that Asia take more of the necessary currency adjustment than it has thus far.

[font='trebuchet ms', arial, sans-serif]Resist.136.56

135.78



135.49



134.22



133.44

Support
[/font]






USDCAD

USD/CAD has churned around in an unconvincing fashion. The price action and failure of higher levels to hold suggest that the sellers may have their day in the coming sessions back to at least 1.2325 and possibly 1.2280 and slightly beyond to the downside. Any break higher may be ephemeral and isn’t to be trusted unless it holds into next week.



[font='trebuchet ms', arial, sans-serif]Resist.1.2571

1.2487



1.2405



1.2319



1.2235

Support
[/font]






USDCHF

USD/CHF pulled all the way back to 1.1900 resistance as EUR/CHF was strong overnight. The sloshing price action could see the pair spilling over higher toward 1.1920 or so today – but an eventual resolution downward is preferred with the first major target at 1.1650 once 1.1790 support is taken out.



[font='trebuchet ms', arial, sans-serif]Resist.1.2072

1.1984



1.1903



1.1808



1.1720

Support
[/font]






AUDUSD

AUD/USD has pulled back to support again as traders may be a bit nervous about the RBA announcement this tonight (Wednesday for Australia) at 22:30 GMT. The 0.7725 support area may hold, though brief forays below that level can’t be ruled out. 0.7800 is the key upside resistance that must be taken out to encourage the view that the pair may head on higher to challenge the big 0.8000 top from early 2004.

[font='trebuchet ms', arial, sans-serif]Resist.0.7838

0.7792



0.7727



0.7701



0.7656

Support
[/font]






NZDUSD

NZD/USD remains supported above 0.7100 and even 0.7080. A break above 0.7200 could see the pair to 0.7320.

[font='trebuchet ms', arial, sans-serif]Resist.0.7216

0.7165



0.7103



0.7063



0.7012

Support
[/font]




The support/resistance levels used in the matrix’s of this document are levels derived from yesterday high, low and close. Reference in the text to other support/resistance levels will occur.

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